Q: Why am I having problems installing an OS into a Hyper-V virtual machine (VM) using Dynamic Memory?
A. This is likely not a dynamic memory problem but simply that you're setting the startup values too low. Remember that the way Dynamic Memory works is that you set a starting amount of memory, and then a maximum and minimum amount of memory.
Via the Hyper-V Integration Services, the amount of memory used by processes is monitored, and additional memory added if the amount of memory used by processes is high.
During installation of an OS, the Hyper-V integration services aren't running, which means dynamic memory can't detect the amount of memory being used by processes and therefore won't add additional memory. This means its important to ensure you set the startup memory to a high enough amount to enable the OS to install.
As a general guideline, set the startup memory to at least the minimum specified in the OS requirements--for example 2GB for 64-bit Windows 8--and then set the minimum amount of memory to less, to allow memory to be given back to the host once the OS is up and running.
